One of the reasons people choose term insurance plans is because of the wide range of rider options you get with it. These allow you to get additional coverage by paying a little extra premium. So, what exactly are riders? What type of riders do you get term insurance plans? Read on to find the answers to these questions.
What Are The Riders In Insurance?
A rider is referred to as an insurance policy provision that amends or adds benefits to the terms of your standard insurance policy. They offer policyholders additional coverage options.
What Are The Types of Riders in Term Insurance Plans?
Following are the common insurance plan riders:
Accelerated Death Benefit Rider
People suffering from terminal illness end up spending a substantial amount of money towards medical treatment and related costs. An accelerated death benefit rider can prove to be helpful to the individual as well as his or her family. This allows the family to acquire a portion of the insured amount in advance. The money can be used to pay for the expenses during critical times. The riders highlight the amount that the insured will be paid in advance.
Critical Illness Benefit Rider
In this form of a rider, if the policyholder is diagnosed with a critical illness, he or she will receive a lump-sum amount. The condition is that the critical illness should be pre-specified in the fine print of the policy. Some of the major diseases covered under this rider include heart attacks, cancer, stroke, coronary artery by-pass graft surgery, paralysis, certain organ transplant, kidney failure, etc. Post the detection of the illness, and the policy may or not continue depending on the predetermined terms and conditions.
Accidental Death Benefit Rider
In case the insured dies when the policy is active, due to an accident, this rider allows you to get the additional sum assured. This sum is calculated on the existing active policy. The percentage of this rider may differ from one provider to another. Moreover, in certain cases, there might be a cap on the optimum insured sum. But the premium continues to stay the same throughout the term of the policy.
Accidental Disability Benefits Riders
In case the insured individual meets with an accident becomes permanent or partially disabled due to it, this rider can be helpful. When an accidental disability benefits rider is added, generally policies pay the insured regularly for five to ten years after the disability. The benefit is taken from a particular percentage of the insured amount. It is often accompanied by the accidental death rider. This can be used as a source of income. However, note that you will only receive the benefit if the disability is caused by accident.
Waiver Of Premium Rider
In this form rider, it is certain that the insured will not be able to pay the premium due to disability or income loss. So, the rider waives off the future premium. A distinctive feature of this policy is that the insurance policy continues to remain active. If you do not take this rider and deal with income loss or disability you are not able to pay the premium, the policy would just lapse, and you will not get any death benefits.
Income Benefit Rider
This type of rider is essentially centered on income generated post the death of the insured individual. When an income benefit rider is added to your main policy, your family acquires additional income yearly for five to ten years on top of the insured sum.
Final Thoughts
There you have it; these are the most commonly provided riders by the term insurance providers. The way they are offered may vary from one company to another. Therefore, it is imperative to understand each rider carefully. Read through the fine print carefully before you add them to your policy. Make sure the rider that you are adding is adding value to your existing policy.
